STI: 2,980 next?

How different things look after just one week. The much talked about head and shoulders pattern seems to be turning elusive. 2,400 points on the STI seems to have become just a horror story told to scare the uninitiated.  These are things which even experienced chartists thought quite likely, not just some amateur TA practitioners.  This is another example of how everything works on probabilities, never absolutes.

The MACD averted a bearish crossover with the signal line on 1 July.  On 6 July, a bullish engulfing candle was formed and the MACD started pulling away upwards from the signal line, another bullish sign. Now, a white candle is pushing the upper Bollinger band and the bullishness could continue to test 2,947 next or thereabouts as indicated by the 123.6% Fibo line and, possibly, 2,982, the 138.2% Fibo line. Could it go higher to retest the high of 3,037 achieved on 15 Apr? Who can say for sure?

2,890 is now immediate support as the 20dMA seems set to form a golden cross with the 100dMA next.

Related post:
STI: 2400 is still a real possibility.

SPH: Up channel?

Although it formed a black candle, SPH is still trading above the eventual target price of $3.88 I set for the mini double bottom formed in May/June earlier. It is also trading above a cluster of MAs which should now provide some support instead of resistance. The next target is $4.08 if the mini double bottom is a valid pattern.

MFI is in an uptrend and this suggests strengthening demand. So, although there is a sell signal on the MACD histogram, we could be seeing the beginning of an up channel. If this pans out, then, buying at channel support and selling at channel resistance could yield some nice gains. The channel support is now at $3.80 or so.

Of course, if price goes parabolic next week, SPH could hit $4.08 very quickly.  Then, I would sell more of my shares.  A parabolic move in price is mostly unsustainable.

My plan? If price drops to the cluster of MAs, approximating the trendline support, buy some.  If price goes higher and hits the $4.08 target, sell some.

SPH off 0.5%; Eyes on 3Q10 results, 2Q10 GDP. Investors pausing for breather while awaiting media group’s fiscal 3Q10 results, guidance for coming quarters due Monday. Some analysts expect more upside for stock pending Singapore’s advance 2Q10 GDP data due July 14.
Friday, 09 July 2010

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Related post:
Charts in brief: 5 Jul 10.